Before reading any further:

This document does NOT constitute financial advice. Before implementing any of the below ideas, you must consult a licensed financial advisor. This information is of a general nature only. These statements represent actual examples that the author has applied to their own financial situation. Everyone’s financial circumstances are different. It is essential that you take responsibility for seeking advice from a qualified financial professional who fully understands your specific financial situation and needs before applying any of the below tips.

 

1. a) If you have a mortgage – Make sure that you have a 100% offset account and put every cent you have into it. Do not put it in a savings account! Currently in Australia home loan interest rates are reaching 10% and above for a lot of people so anything to reduce the interest bill is a help. Lets say you had $50,000 in savings (that would be nice) and you have it in a high interest online savings account at approx 8%. That’s approx $4000pa in interest (not compounded). At 48.5% tax ($1940) that leaves you $2060). If you put that same $50,000 into your offset account you would save approx $5000 in interest or effectively earning you 10% interest and no tax to pay.

1. b) If you don’t have a mortgage – Set up an Automatic deduction online bank account. You can set up managed funds and savings plans that you can control. They link into your existing bank account and pay a higher rate of return than your everyday account with no fees for most of them. If you can manage it try to save at least 10% of everything you earn. If you get a bonus, take 10% and put it away. If you get a tax return, take 10% and put it away. Never touch this money!! You only add too or invest it when you reach a high amount. Call this your Financial Freedom Account. Important – Do not buy a Plasma TV with this money, Do not spend any of this…Ever!

2. Fuel – Fuelwatch websites can save you a lot on the pump price of your fuel. If you look at the price cycle of fuel then Tuesdays is a pretty good time to buy on average. When you combine a few savings tips it gets better. Buy your fuel from the cheapest site close to you on the Tuesdays and use your shopping dockets to reduce it down by a minimum of 4 cents per litre. By combining these you will save up to 10 % or more per litre.

3. Negotiate – Everything is negotiable. If you remember this alone you will save heaps. I have applied this rule for pretty much everything for a whole year and have saved thousands! Purchasing a business, vehicles, clothes, property etc nothing is off limits. What is the worst that can happen? They say no..Did you really want the item anyway?

4. Fill the Piggy – Remember back when you were a child and saving for the occasional sweet or movie tickets (well that was me anyway). Go back to the times of old and get a piggy bank. Every day you come in the door, empty your pockets and put it in the piggy. When it gets full, count it and take it to the bank. The banks do have counting machines, but they do often get it wrong, so make sure the amount they tell you is always in your favour.

5. Keep your receipts for a month – Not just some of them all of them! If you buy fuel, shopping, a meal, a night out, a taxi, parking, a bottle of water, a coffee etc. Doing a real cash flow analysis of what you spend will surprise you. Some times getting a receipt for a can of drink might be a bit silly, so keep a cash flow notebook in your pocket and note down every purchase. At the end of the month calculate every spend and see where you could minimise the next month. Do this for three months and you will find your spending reduce dramatically, if only to reduce your record keeping.

6. Vouchers/Coupons – I eat out a lot, and purchased a diners coupon book. This does a couple of things. I get to try a lot of places I never would have thought of and I save money every time I eat, sometimes up to 50%. It cost me $65 and paid for itself in less than a week. (I did say I eat out a lot). Frequent coffee buyers cards, keep them in your purse or wallet.

7. Credit Cards – Review your credit cards often! If you have a high credit limit and it’s near it’s maximum, then find the current offers on balance transfers to help reduce the debt and pay it of as fast as possible. Some offer 0% interest on balance transfers for 6 or 12 months, or even the life of the transferred amount (Check the ongoing fees). Work at paying it off as fast as you can in the time limit. Don’t up your credit limit when offered! Banks will entice you by saying, Congrats, you can now increase your limit by $3000 or $6000 etc. You don’t need it. If you have more than one card, pay off the the one with the highest interest first. Then add the monthly payment to the next one along with the minimum payment amount. This will speed up the payment of each subsequent card and reduce your annual fees.

8. Financial Advice – The man over the back fence does not represent credible financial advice. The Taxi driver does not represent financial advice. The well advised unemployed brother in-law does not represent financial advice. When implementing any financial strategies, make sure they have been tried and proven, represent specific tailored advice based on your individual circumstance. Any thing else is just gambling!

Tony Longbottom
www.JourneyToWealthClub.com